OSC to accept 'no-contest' settlement agreements

CBC News Posted: Mar 11, 2014 3:57 PM ET Last Updated: Mar 11, 2014 5:25 PM ET

The Ontario Securities Commission has decided to let some individuals and companies settle misconduct disputes with the regulator without formally having to admit to any wrongdoing.

The new policy, often referred to as a no-contest settlement, is aimed at speeding up the whole enforcement process.

Under the old rules, the OSC required some admission of wrongdoing before a settlement could take place. That made for often difficult negotiations as defence lawyers worried that such admissions could leave their clients more vulnerable to other legal action from shareholders. 

The OSC says its staff are continuing to explore the possibility of introducing a whistleblower program that would reward tipsters who provide the OSC "with actionable information about misconduct in the marketplace." 

The OSC said it would be up to the commission to accept or reject any proposal to settle a case with a no-contest agreement.

The commission says serious cases of wrongdoing — including cases of abusive, fraudulent or criminal conduct — will still require formal admissions of misconduct. A no-contest settlement will also not be allowed in cases where the accused "misled or obstructed" staff during the investigation.?

"When heightened accountability from respondents is paramount, we will continue to seek admissions as part of any proposed settlement agreement,"? said Tom Atkinson, the OSC's director of enforcement, in a statement.

An investor protection advocacy group says it has some misgivings about the new policies. 

"We're concerned that they (the policies) may have the overall effect of reducing deterrents and end up being viewed . . . (by) wrongdoers as a licence fee for wrongdoing," said Neil Gross, executive director of the Canadian Foundation for Advancement of Investor Rights (FAIR). 

"You can pay a fine and be on your merry way."

The OSC said it assessed more than $80 million in administrative penalties, disgorgement orders and settlement amounts in 2012-13.

No-contest settlements have been a hallmark of U.S. securities policy for many years. The U.S. Securities and Exchange Commission often reaches huge settlements with targeted companies or individuals without them having to formally acknowledge wrongdoing.  

That has been controversial. In 2011, for example, a U.S. federal judge rejected a $285-million US settlement that Citigroup reached with the SEC, in part because the financial giant was not required to admit any guilt.

The SEC had accused the bank of betting against a complex mortgage investment in 2007 — making $160 million US in the process — while investors lost millions.

With files from The Canadian Press Mar 12, 2014 4:41 PM ET Mar 12, 2014 4:34 PM ET Mar 12, 2014 4:15 PM ET Mar 12, 2014 4:34 PM ET Mar 12, 2014 4:41 PM ET

The data on this site is informational only and may be delayed; it is not intended as trading or investment advice and you should not rely on it as such.

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Average Wall St. bonus up 15% to $164,530 US

CBC News Posted: Mar 12, 2014 9:44 AM ET Last Updated: Mar 12, 2014 8:31 PM ET

The average Wall Street banker's bonus last year rose to the highest level since the recession, and up to the third highest figure on record, new data out of the N.Y. state comptroller's office showed Wednesday.

"Wall Street navigated through some rough patches last year and had a profitable year in 2013," New York State Comptroller Thomas P. DiNapoli said. "Securities industry employees took home significantly higher bonuses on average."

The typical Wall Street worker took home $164,530 US in bonuses last year, the data shows. That's up 15 per cent from 2012's level and dwarfs compensation seen in any other industry.

The most recent data from Statistics Canada shows the average salaried worker earned $933 a week in December 2013. That works out to just over $48,000 a year — less than a third what Wall Street bankers were paid on top of their base salaries.

There's also evidence, however, that New York bankers may feel they're earning their pay. Total reported profits for broker/dealer operations among the big banks totalled $16.7 billion in 2013. That's 30 per cent less than the $23.9 billion they made in 2012 but still strong by historical standards.

Indeed, the industry as a whole has definitely rebounded from the financial crisis it started. Wall Street's securities industry has now been profitable for five consecutive years, including the three best years on record, the comptroller's office said.

If there's an area in which Wall Street is still hurting, it's likely in job numbers. DiNapoli estimates the securities industry employed 165,200 workers in New York City in December 2013, which is 12.6 per cent fewer workers than before the financial crisis. 

It's still an economic engine for New York, though. Wall Street makes up five per cent of the private sector jobs in New York, but it's responsible for 22 per cent of all the wages paid. And the state collected $10.3 billion in taxes from the industry last year, the data shows.

Mar 12, 2014 4:41 PM ET Mar 12, 2014 4:34 PM ET Mar 12, 2014 4:15 PM ET Mar 12, 2014 4:34 PM ET Mar 12, 2014 4:41 PM ET

The data on this site is informational only and may be delayed; it is not intended as trading or investment advice and you should not rely on it as such.

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